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China announced it will increase its military spending by 11.2% this year, further establishing its position as a growing regional power. The figure, which was announced ahead of the start of this year’s National People’s Congress, is closely followed by China’s neighbors as an indicator of China’s growing capability to project force beyond its borders. On Monday Premier Wen Jiabao, in his annual work report that begins the NPC session, said the most important capability for China’s People’s Liberation Army (PLA) “is to win local wars under information-age conditions.”

This year’s defense budget will be held up against President Obama’s “pivot” to Asia for any signs that China is further strengthening its capabilities in response to U.S. plans to increase its military presence in the Pacific. Chinese officials have emphasized that the increase in spending is in line with their country’s growing economy and doesn’t represent a threat to the region. “The Chinese government has maintained reasonable and appropriate growth in defense spending on the strength of rapid economic and social development and the steady increase of fiscal revenues,” Li Zhaoxing, the spokesman for the NPC, told a press conference Sunday. China will spend $106.4 billion on defense this year, Li said. Its military budget is still a fraction of what the U.S. spends. In December the U.S. Congress approved a $662 billion defense budget for this year. Precise comparisons are difficult because the actual spending on military activities for both countries is greater than the publicly disclosed budgets and analysts can only estimate the total costs.

China’s annual growth in military spending has averaged over 10% for more than a decade, though yearly increases have varied. From 2006 to ’08 the average annual increase was 18%, but that dropped to 7.5% in 2010 amid the global economic slowdown. China has embarked on several big-ticket military-weapons programs including development of a stealth fighter jet and an aircraft-carrier program. China’s growing economy has meant its business interests are more international than ever, and its citizens are working across the globe. Chinese workers, particularly those involved in mining and drilling, are stationed in many unstable countries, putting new pressure on the government to protect them. One year ago China evacuated an estimated 30,000 workers, many who worked in oil drilling and refining, from Libya in the early days of that country’s civil war. And in early 2012 several dozen Chinese workers were kidnapped by rebels in Sudan, where they were working on a highway project. That has raised calls for greater protection of Chinese interests abroad. In 2009 the PLA Navy sent its first naval patrol to help combat piracy in waters off Somalia.

China’s long-running territorial disputes with neighbors over the South China Sea and East China Sea have flared in recent years. The possibility of significant underwater oil and natural-gas deposits have raised the stakes of those disagreements, particularly with Japan over the Diaoyu Islands in the East China Sea and Vietnam and the Philippines over claims to the South China Sea. “Any double-digit increase in defense spending is likely to worry China’s neighbors, especially when China has sustained similar increases for almost two decades,” M. Taylor Fravel, an associate professor of political science and expert on China’s military at the Massachusetts Institute of Technology, said via e-mail. “Nevertheless, this increase is slightly lower than the average increase over the past decade.”

In general, increases in China’s defense budget closely follow increases in the government’s overall budget, Fravel said. He added that the latest figures showed no sign of Chinese reaction to the increasing presence of the U.S. military in the region, including the stationing of Marines in northern Australia. “Because the current increase is consistent with the average over the past decade, this budget shows that China is not going to respond to the U.S. pivot in the short term with a significant increase in defense spending,” Fravel said.